Personal jurisdiction; Forum-selection clause; “Of”; The Contract Disputes Act (CDA) (41 USC § 7101 et seq); A “pass-through” or “sponsored” claim; Whether interpreting the forum-selection clause to include state courts would render it meaningless & unenforceable; Judicial estoppel: Nawai Wardak Transportation Company (NWTC); The United States Agency for International Development (USAID)

The court agreed with plaintiff-NWTC that, “by interpreting the forum-selection clause to exclude state courts, the trial court rendered the forum-selection clause nugatory because ‘there is no federal forum with subject-matter jurisdiction over this action.’” But it held that defendants were not judicially estopped from arguing that the forum-selection clause was void or unenforceable. Thus, it vacated the trial court’s order dismissing NWTC’s claims for lack of personal jurisdiction and remanded for consideration of whether the clause was enforceable. The case concerned a subcontract for the supply of fuel to support U.S. government operations in another country. Reviewing the language of the forum-selection clause, the court found that the “dictionary definition of ‘of’ supports that, while Michigan courts may be in the United States, they are not of the United States.” Although defendants stopped short of claiming that the clause was ambiguous, they argued that “the plain language of the forum-selection clause and the circumstances surrounding the formation of the subcontract support that NWTC’s claims had to be filed in a federal court.” Because NWTC and defendant-RMA Afghanistan were subcontractors that had “no direct contact with USAID—the federal executive agency that contracted with the prime contractor in this case—neither can bring a claim under the CDA to remedy any breach of the contract between them.” In addition, “federal courts are courts of limited jurisdiction. Foreign parties such as NWTC and RMA Afghanistan cannot confer subject-matter jurisdiction upon a federal court by merely agreeing to have their disputes resolved in such courts.” Defendants conceded that NWTC could not file a claim in a federal court or file a direct claim under the CDA. But they maintained that “the trial court’s interpretation of the phrase ‘courts of the United States of America’ to refer only to federal courts does not render the forum-selection clause nugatory because NWTC can file a ‘pass-through’ claim.” However, the court concluded that “a pass-through claim does not provide a means to resolve the parties’ dispute because contracting officers have no jurisdiction over disputes between subcontractors.”